Asurion Group Inc.

The stable outlook reflects S&P Global Ratings' expectation that despite the material headwinds including a significant contract loss and FX translation losses between the U.S. dollar and Japanese yen, Asurion will maintain its dominant presence in the mobile protection industry and sustain credit metrics supportive of the rating. In 2022, we expect the company to report an 18%-22% revenue decline driven mostly by Sprint membership losses, FX translation pressures, and lower incidence rates. Revenues should transition toward low-single-digit growth in 2023 as the core business generates modest membership growth along with ongoing Soluto penetration and growth opportunities within its other product offerings. We expect EBITDA margins to average 24%-25% in 2022-2023. Additionally, we forecast S&P Global Ratings-adjusted debt to EBITDA

...Asurion Group Inc. maintains a strong market position and international presence in mobile device protection. With revenues of nearly $8.5 billion as of the last 12 months ended Sept. 30, 2022, the company holds an approximately 70% market share in the handset protection market. Its U.S. business represents 75% of revenues, with the remaining 25% derived from its international presence, with majority from Japan. We view its mobile device protection services as its bread and butter and expect it to remain as core to its product offerings, though the company is increasingly edging into other adjacent services to expand its client reach and penetration and enhance its brand stickiness. Foreign exchange (FX) headwinds between the U.S. dollar and the Japanese yen are pressuring EBITDA, though hedges are a material risk mitigant. As of third-quarter 2022, approximately 25% of Asurion Group Inc.'s revenues and 38% of its EBITDA is derived outside of the U.S., with the majority from Japan. The...

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